02 S4HANA Finance and Central Finance

S/4HANA Finance
Transform Finance with Instant Insight

Ramanathan Nagaratnam Timachipuram (Ram),
Senior Solution Architect -Financials, SAP SEA, Singapore
10 May 2016
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© 2016 SAP SE or an SAP affiliate company. All rights reserved. 2

S/4HANA FINANCE WORKSHOP AGENDA
S/4HANA Finance Overview
Accounting Powered by HANA

§ Single Source of Truth
§ New Asset Accounting
§ Accounting and Financial Close
§ Inter-Company Reconciliation
§ Accelerated Profitability Analysis
§ Intuitive User Experience
Cash Management on HANA

§ Cash Operations Overview
§ Bank Account Management
§ Liquidity Management
§ Offline Demo – Cash Operations, Liquidity management and Bank Account Management
Central Finance
§ Central Finance Overview

What is SAP S/4HANA Finance?
SAP S/4 HANA FINANCE IN A NUTSHELL

SAP S/4 HANA Finance is a comprehensive portfolio of Finance solutions based on SAP HANA deployed in the
cloud or on premise. It delivers instant insight, is easy to use and easy to consume. It enhances the current
solution portfolio, preserving its functional strength while enabling non-disruptive migration.
Transformative business value New intuitive user experience for Flexible and non-disruptive
from instant insight all devices provided by BI and deployment in the cloud or on
enabled by SAP HANA Fiori premise

SAP S/4HANA Finance
The world’s leading Finance solutions. Reinvented
Instant Insight Intuitive User Experience Flexible and Non-disruptive

in memory-enabled across devices cloud or on premise
Ad-hoc, real-time views
Data dimensions

Financial Excellence Through End-to-End Processes
Financial Accounting Treasury and Collaborative Enterprise Risk

Planning and and Financial Financial Risk Finance and Compliance
Analysis Close Management Operations Management
Outperform Provide timely and Seize and fund Improve finance Proactively manage
corporate accurate financial business efficiency and enterprise risk and
financial and regulatory opportunities as deliver superior compliance at
objectives and reporting they arise, while service at reduced cost
create avoiding reduced cost
sustainable value financial risks
Improve Financial, Operational, and Managerial Processes

While Driving Profitability and Growth

SAP S/4HANA Finance
SAP Accounting SAP Cash Management SAP Integrated Business

powered by SAP HANA powered by SAP HANA Planning for Finance
Alternative in-memory New product for New capabilities and enhanced
functionality for ERP customers Group Cash Management integration for ERP and BPC
Business Suite on HANA
SAP HANA Platform
Aligned Agile Predictive

Single Source of Truth Real time processes Dynamic Planning and Analysis

SAP Accounting powered by SAP HANA
Overview: Single Source of Truth
Challenges of the Old Architecture
Multiple Sources of Truth
Challenges
§ The combined content of several tables represents
“the truth” in SAP ERP. Reconciliation efforts are
required by design.
§ Need “to move” data to the appropriate table for
reporting (e.g., “settlement”)
§ Different level of detail stored in the respective
components/tables
§ Components are structured differently (e.g.,
fields/entities differ)
§ Different capabilities in the components (customer
Reconciliation
fields, currencies, multi-GAAP, etc.)

§ Performance often required the usage of a data
warehouse introducing another redundant repository.
§ Multiple BW extractors needed to cover the complete
truth in data warehouse.
Business
Warehouse

Universal Journal
Single Source of Truth
Benefits
§ One line item table with full detail
for all applications - for instant
insight & easy extensibility
§ Data stored only once: no more
reconciliation needed - by design
§ Reduction of memory footprint
through elimination of redundancy.
§ Fast multi-dimensional reporting
without replicating data to business
warehouse (BW).
§ If a warehouse is in place anyway,
only one single extractor needed.
§ Secondary cost elements are now
G/L accounts.
A single universal journal entry can have (technically) up to 999,999 line items
à less or no need for summarization (depending on data volume)

List of FI/CO Tables Replaced by CDS Views

Significantly Reduced Memory Consumption
18,5x
Smaller data footprint
observed based on real
customer data
HANA data base compression

No more persistent indices and aggregates/totals
No replication to data warehouse system for operational reporting
Lower TCO and higher through-put

Non-Disruptive Approach
Old Totals Tables and Old Line Item Tables are „Virtualized“
GLT0
Custom program FAGLFLEXT Compatibility
Select Redirect Read Universal
or report COEP Views Journal
…
Read access from custom ABAP programs or reports to prior tables will work as before
Read access is automatically re-directed to the universal journal as the new single source of truth.
Advantage of the new architecture: no more reconciliation and reduction of memory footprint.

Convergence of G/L Accounts and Cost Elements

Extension Ledger
Flexible Management Views on Top of Unification in Accounting
Universal Journal Innovation and Benefits

§ Flexible mechanism for adjustments and reporting.
Extension Ledger A Extension Ledger B § Storage of delta values, reporting of full values.
§ Important use cases: management views on top of
“Post into closed periods “Distribute revenues
for restatement purposes” differently across units”
group valuation, tax views on top of local valuation.
Extension Ledger C § Only minimal configuration effort required.
“Adjust data for
consolidation purposes”
§ Extension ledgers can be stacked. Multiple
extension ledgers can point to same base ledger.
§ Manual postings or data load via interface – no
automatic postings.
Ledger IFRS
§ Benefit of reduced data footprint
§ Benefit of reduced reconciliation as only delta
Ledger Local GAAP postings are maintained in the extension ledger.

New Asset Accounting
New Asset Accounting

New Depreciation Run

Posting Logic in New Asset Accounting

Accounting and Financial Close
Need for Improved Speed, Compliance, and Insight While Reducing Costs
Analyze Execute Control
Achieve real-time insight Increase the efficiency and Ensure the quality and
into the progress, quality, and speed of your financial “close to governance of the financial
financial results of the disclose” process through close through templates,
financial close process on automation, integration, faster workflow, and an end-to-end
any device for better processes, better collaboration, management of the entire close
business decisions and and intuitive self-service access to meet regulatory disclosure
faster issue resolution to financial information mandates

Accounting Entity Corporate Reporting and

Close Close Disclosure
General Ledger
Intercompany Reporting
Reconciliation and Analysis
Sub-Ledgers
Account
Reconciliation
Consolidation
Entity Close
Leasing Disclosure
Management
Notes Management
Revenue Management
Accounting
Financial Process Controls

Close Master Data Governance for Financials
Governance Financial Close Management

Typical Customer Pain Points with Financial Close and Benefits of
SAP
Customer Pain Point Benefits of SAP

Inconsistent financial transaction data Single source of truth of internal and external financial data
Inconsistent financial master data Solid governance process with workflows and automatic distributions
Time-consuming reconciliations Reconciled by design and/or powerful continuous reconciliation
Long-running batch processes Significant acceleration or elimination of entity and corporate close tasks
High effort, delays and low quality caused by
Automation of manual closing tasks
too many manual steps
Latencies in reporting and no access to detail Real-time visibility into business performance in highest granularity
Dependency on IT for new reporting demands Finance architecture supporting self-service analytics
Limited flexibility in reacting to business
Strong forecasting, planning, and simulation capabilities
changes
Missing process oversight Strong governance and real-time analytics for close progress

Why Close Books Faster and Simpler?
Higher profitability/growth Lower effort and costs

due to earlier insight due to less time spent
Higher quality/lower risk Requirements from

due to more time for analysis external regulators
Higher company reputation/

lower cost of equity

Accelerated Financial Close – Innovations
Soft Close – Better Insight within the Period

§ Single source of truth – all data are reconciled by design
§ Real-time profitability by earlier derivation of market segment from cost center, internal order, WBS element
§ Real-time overhead calculation
§ Correct asset acquisition values for all valuation areas at any time – no more periodic posting run required
§ Continuous intercompany reconciliation and goods / invoice receipt reconciliation
Hard Close – Elimination of Closing Tasks
§ Elimination of huge reconciliation efforts by the introduction of the universal journal
§ See improvements mentioned under “Soft Close”
Hard Close – Acceleration of Closing Tasks
§ Speed-up of material ledger close, accrual and overhead calculation, allocations, results analysis, variance
calculation for production orders/cost centers, work in process calculation, settlements, asset depreciation, …
§ Significant speed-up of all kind of reporting for better business decisions (through faster insight and easier
simulation) and higher quality (through easier root-cause analysis)

SAP Financial Closing cockpit
Plan
Entity Close
Analyze Execute
Management
Monitor

Real-Time Profitability
Innovations and Benefits

§ Full level of detail stored for use in all
applications.
Example 1: Fixed asset causing the
1
depreciation is available in cost center
reporting.
§ New structural capabilities: Ability to
analyze costs for all cost object types
together
Example 2: Air travel costs can be analyzed
across different CO-objects in one report
§ Further specific analysis by market
segment is possible without waiting for the
closing process to happen.
Example 3: Air travel for customer projects
by region
2 3
General Ledger and Management Reporting – Offline Demo
GL and Management Reporting
http://demo.tdc.sap.com/SpeedDemo/8ebc5f3d7fec80e7/
http://demo.tdc.sap.com/SpeedDemo/7502b1750f9bcdf8/

SAP Invoice and Goods Receipt Reconciliation
Continuous Fast and Efficient Reconciliation Aligning Multiple Stakeholders
Fast Reconciliation
Single app replacing multiple back-end transactions
Modern HTML5 web user experience
Configurable analytics with multiple KPIs
Real-time insight into invoices, good receipts, master
data, and supporting information
Drilldown to core transactions in SAP ERP
Efficient Collaboration
All contact data in one screen
Telephony support (phone, SMS)
Documentation of processing steps and status

Inter-Company Reconciliation
Intercompany Reconciliation
Continuous Reconciliation by Eliminating Batch Loading and Matching
Continuous Reconciliation
Execute at any time in the period with immediate
results, thus avoiding bottlenecks at period-end
Direct access to open items in accounts receivables
and accounts payables stored in SAP HANA
No more batch loading for companies managed in the
same system
Automatic matching on the fly – no more batch
process
Modern User Experience

Easy to navigate web user interface
Better process oversight through new dashboard
Improved reporting and collaboration

Intercompany Reconciliation in SAP ERP
Optimization for SAP HANA
SAP ERP SAP S/4 HANA SAP S/4 HANA

Finance Finance
ICR works directly as Central Finance
ICR ICR works directly
on FI documents on FI documents
Accounting IC-Data Accounting IC-Data Accounting

Documents Documents Documents
SLT
Other Other Other Other
SAP or SAP or SAP or SAP or
Non-SAP Non-SAP Non-SAP Non-SAP
Long-running batch Real-time processing for Real-time processing for

data load processes companies on central system all companies in the group
Batch Real-time
Intercompany Reconciliation
Continuous Reconciliation by Eliminating Batch Loading and Matching
Continuous Reconciliation
§ Execute at any time in the period with immediate results,
thus avoiding bottlenecks at period-end
§ Direct access to open items in accounts receivables and
accounts payables stored in SAP HANA
§ No more batch loading for companies managed in the
same system
§ Automatic matching on the fly – no more batch process
Modern User Experience

§ Easy to navigate web user interface
§ Better process oversight through new dashboard
§ Improved reporting and collaboration

Data Presentation and Reconciliation Functionality
Functionality
n Assign documents / delete assignments
n Set status (e.g. communication and processing status)
n Find matching documents using customizable rules
n Correct transaction currency and amount
n Correct amount, wrong transaction currency
n Communication support
n Template based mails
n Contact person database
n Customer specific functions through BAdI
n Standard functions can be deactivated

Accelerated Profitability Analysis
Harmonized Internal and External Reporting
Financial Reporting Management Reporting
Traditional Financial ERP

Reporting Scope FI OR CO OR CO-PA Financials
Unified Reporting SAP Accounting

CO-PA
including FI + CO + Dimensions
powered by
Profitability SAP HANA
Comprehensive Reporting incl. CO and CO-PA detail with SAP Accounting powered by SAP HANA
Reporting is not limited by application boundaries
Run one report (e.g. P&L) and drill-down to any dimension available in the financial documents

Real-Time Profitability
Innovations and Benefits

§ Full level of detail stored for use in all
applications.
Example 1: Fixed asset causing the
1
depreciation is available in cost center
reporting.
§ New structural capabilities: Ability to
analyze costs for all cost object types
together
Example 2: Air travel costs can be analyzed
across different CO-objects in one report
§ Further specific analysis by market
segment is possible without waiting for the
closing process to happen.
Example 3: Air travel for customer projects
by region
2 3
Enhancements of Profitability Analysis
SAP Accounting focuses on the enhancement and integration of account-based CO-PA
Account-Based CO-PA
§ Significant enhancements delivered – closing critical gaps of the past, and providing new real-time insight.
§ Split of cost-of-goods-sold posting on multiple accounts (by cost component)
§ Split of production variances posting on multiple accounts (differentiation of price / quantity effects)
§ Three new quantity fields in the line items + BAdI for conversion of logistic quantities to common quantities
(e.g. products sold in different box sizes – but KPI in Finance is calculated on tons/KG of products)
§ Real-time derivation of market segment information from cost postings (cost center, order, WBS element).
Costing-Based CO-PA
§ Product continues to exist and be supported, but no enhancements with SAP Accounting.
§ Customers can run account-based and costing-based CO-PA in parallel.
§ Existing customers should assess if account-based CO-PA can cover their needs.
§ If yes, consider switching to account-based CO-PA. If no, continue using costing-based CO-PA.

Accelerated Profitability Analysis Offline Demo
http://demo.tdc.sap.com/speeddemo/c8568a163fedb6e8/

Significantly Reduced Reconciliation Effort
§ Obsolete – G/L versus FI sub-ledgers and CO – due to universal journal

§ Obsolete – G/L versus CO-PA * – due to universal journal
§ Obsolete – Reconciliation of multiple ledgers ** – due to universal journal
§ Obsolete – Reconciliation Ledger ** – due to universal journal
§ Obsolete – Reconciliation of ERP and data warehouse – due to real-time analytics on SAP Accounting
§ Obsolete – Reconciliation of totals vs. line items – due to dropped totals
è Faster financial close and lower costs

* for account-based CO-PA
** already available with New G/L in SAP ERP

Intuitive User Experience
Intuitive User Experience of SAP S/4HANA Finance
“Personalized information for end users with granular drill down“

Business Intelligence Renewed Managerial Roles Renewed Transactional Roles
Web Trial Balance Chief Financial Officer General ledger accountant

SAP Analysis for Office Cash manager Accounts receivable accountant
SAP Lumira Receivables manager Accounts payable accountant
SAP Business Explorer Payables manager Collections specialist
SAP Design Studio Financial close manager Dispute specialist
Finance for managers

Business Intelligence
Multi-Dimensional Drilldown to Line-Item Detail
Web Trial Balance, SAP BusinessObjects Analysis,

included in SAP Accounting Edition for Microsoft Office

SAP Fiori Launchpad
Web-based Entry Point for SAP Business Applications Across Platforms and Devices
SAP Fiori Launchpad is a role based,

personalized, real-time and contextual
aggregation point for business applications
and analytics.
It runs on multiple devices, using

responsive web design, and is
deployable on multiple platforms.
It is designed according to the simple and

intuitive SAP Fiori user experience, while
supporting established UI technologies.

SAP Fiori Launchpad
One entry point for the user
Search across and

Role based with one within apps to get
common role immediate answers
definition
Color coding alerts
user for any overdue,
new or immediate
actions
News and feeds to
enhance
SAP Jam integrated to
collaboration
provide instant feedback
on notifications and
group activity
Group tiles for Dynamic charts to

personalized provide high level,
content organization real-time overview

Renovation of the User Interfaces
Analytical Apps Transactional Apps Fact sheets

Insights Task-based Access Search and Explore
Visual overview of a dedicated topic Access to tasks like change, create, View essential information about
for further KPI-related analyses or approve processes with guided objects and contextual navigation
navigation between them
Run on: Run on:
These are the building blocks for defining a specific SAP Fiori Launchpad.
Transactional Fiori Applications
“Significant increase of efficiency in transactional work.“
Benefits
§ Designed how people work
§ Access to all relevant information
§ Less screen changes, less clicks
§ Look-ahead functionality
§ Powerful search
See comparisons of user experience of

SAP Fiori versus SAP GUI on Youtube
(e.g. LINK)
Clear incoming payments Post G/L journal entries Manage master data …
Fact Sheets
“Easy exploration of master data and other objects.“
Fact Sheets
§ G/L accounts
§ Fixed assets
§ Profit centers
§ Cost centers
§ Internal orders
§ Accounting documents
§ …

Example – SAP Fiori Apps available for Accounts Payable
Analytical
Days Payable Outstanding Track Supplier Invoices
Cash Discount Utilization
Future Payables Manage Payment Blocks

Cash Discount Forecast
Transactional Clear Outgoing Payments
Overdue Payables
Create Manual Payment
Schedule Payment Proposal
Aging Analysis
Post Outgoing Payment Revise Payment Proposal
Vendor Payment Analysis
Manage Vendor Line Item Fact Sheet
Invoice Processing Time

Display Vendor Balance Vendor Accounting Document

Example – Accounts Payable Dashboard

SAP Cash Management powered by SAP HANA
An Overview
End-to-End Treasury and Risk Management
Treasury Solution Map
Payments and Bank Monitoring and Status Bank and SWIFT

Payment Operations Workflow and Signatures Payment Factory
Communications Tracking Connectivity
Cash and Liquidity

Electronic Bank Statements Cash Position Liquidity Management Bank Account Management*
Management
Debt and Investment Front Office Mid Office Back Office

Accounting
Management Deal capture Risk Controlling Correspondence & Settlement
Financial Risk Risk Identification Risk Quantification Risk Management

Risk Analysis
Management Type and Origin of Risk Exposure Mgmt Hedge with Financial Instruments
Working Capital
Suite Capabilities Shared Service Center Governance Risk and Compliance Commodity Risk Management
Management
Rapid Deployment
Foundation Cloud HANA Platform Analytics Mobile
Solutions (RDS)
SAP Cash Management powered by SAP HANA
Treasury Solution Map, Edition 2014

Morning Tasks of a Cash Manager
Bank Statement Cash Position Bank Transfer Payment Approval

Monitor whether bank Review yesterday’s Make bank transfer in Approve big-amount
statements have all bank-confirmed case of deficit or payment or bank
been imported position, and forecast surplus. transfer.
successfully. today’s closing
balance.

Bank Account Management
2. Fuzzy Search
Centralized Bank Account Management
1. Bank & 3. Bank Account
Approval process for Bank Account Opening , Bank Account Group
adjustment, and Closing Hierarchy （freestyle)
Separate Bank Account Master Data from G/L 5. Overdraft
Limit
accounts 6. Integrated with 4. New
BCM Payment Bank Account
Signatory integrated with BCM Payment Approval Approval Master Data
Bank
Plenty of attributes reflecting controls on both bank Account
side and internal side Management
Bank Account yearly review process 7. Attachments

9. Workflow for
Bank Account
Navigation to Cash Position and Bank Statement
8. Change
Monitor Reports History
12. Upload / 10. Review
Download Process
11. Cash
Pooling

Liquidity Management: Forecasting
• Projection of receipts and

disbursements
• Medium-term (1 - 24 weeks)
• Integration of all data in
subledgers
• FI invoices
• Treasury Deals
• Memo records
• Tools for optimizing cash
investment and borrowing
• Safeguarding company liquidity

Cash Management Powered by SAP HANA Offline Demo
http://demo.tdc.sap.com/SpeedDemo/0f6eac3ac5827084/

Central Finance
An Overview
Central Finance
Allows customers to adopt the latest SAP Finance innovation without disruption to their existing
ERP systems
Provides a proven transformation approach for your customer’s roadmap to Central Finance

Central Finance(What)
Implementation option (not a separate product) of SAP Business Suite powered by SAP HANA with Financials Add-ons for customers with multi-ERP system
landscapes or out-of-maintenance or highly customized SAP systems
Can provide consolidated financial and management reporting, central process execution and transaction, planning, and reporting based on the same (single
source of truth) data set*
Adoption is non-disruptive and migration over time is possible
What
Dedicated central financeinstance (side-car possible)
Real-time replication of finance data from SAP or non-SAP systems onto central
financefor further processing **
Standard SAP Finance deployment, customer scope **
The central journal leverages

Financials add-ons New Finance architecture
Unified FI/CO documents
Suite on HANA Process optimization / innovation

New user interfaces / user interaction
HANA platform Real-time operational reporting
* requires respective SAP products and licenses (e.g. SAP Accounting powered by SAP HANA, SAP Business Planning) ** Various scope options exist, standard services in place (RDS in process), might
require consulting-based implementation (SAP AGS, Consulting, SAP partners)

central finance(How)
Finance data is copied from source systems onto a central financeinstance. Source Replication
systems can remain in place and continue with local transaction processing. via SAP SLT
The central finance is used for Transaction-based
Central reporting Table replication not recommended
Central processes and use cases
New and improved functions in latest SAP Finance release Requirements
Source systems can be migrated onto the central financeinstance over time System configuration and customizing
Master data synchronization (chart of accounts etc.)
Restrictions
Centrally executed processes must not result in back-
postings to the source systems in order to maintain the
integrity (completeness etc.) and legacy system status of
those systems
The amount of configuration, customizing, and master data
synchronization required in the central instance depends on
the type of process desired. Many scenarios, especially
core GL scenarios, are achievable with limited effort. More
complex scenarios, or scenarios beyond (core GL) Finance
might be challenging or in selected cases not feasible
* requires respective SAP products and licenses (e.g. SAP Accounting powered by SAP HANA, SAP Business Planning)

key scenarios
central finance(Why)
Topic Description BW Central

system Journal *
System consolidation • SAP ERP instances
• Non-SAP ERP instances
ü ü
Centralized reporting • Financial reporting
• Management reporting
ü ü
Real-time BI • Real-time reporting
• Role / Business user interaction
û ü
Central process execution • Closing oriented (non-
operational)
• Cross-client processes û ü
• Corporate / group processes
Big Data entrenched • Exposed SAP-wide data
attributes û ü
• Enclosure of external statistics
Predictive Finance • Trends and forecasting
• Correlation analysis û ü
• Classifications, decision tree’s
Integrated Business • Embedded Planning
Planning • Integrated Business Planning û ü
Code innovation • Smart Cash Management
• FI/CO Code pushdown û ü
• One logical FI/CO document
* based on Suite on HANA with Financials Add-on and corresponding SAP planning, and reporting capabilities

Backup Slides
Simplified Accounting Adoption Roadmap
New Customer
4 6 7
S/4HANA
New Suite Fiori, etc.
FINANCE
Implementation
1 2 3 Implementation
Design
START Assessment On-premise SUCCESS
Adoption
Workshop HANA setup
Process 4 5 Existing Customer 6 7
Migration Migration to
S/4HANA
to New GL S/4HANA Fiori, etc.
Migration
(Optional) FINANCE
Foundation services - SAP

HANA ECC on New G/L Upsell
Customer needs help in S/4HANA
Platform HANA Implementation services
defining Migration Strategy FINANCE
• Migration assessment by Finance SME’s

• Use questionnaire for customer input and Design and set up Migration process

Central Finance Adoption Roadmap
1 2 3 4 5 6
Design HANA Deploy
Assessment Deploy Upsell
START Deployment Platform Central SUCCESS
Workshop New ECC services
Process setup Finance
Foundation services - ECC Fiori,

HANA Platform Central
Customer needs help in Implementation HANA
set up Finance
defining Strategy& process for Finance Live etc.
• Migration assessment by Finance SME’s

• Use questionnaire for customer input

SAP Accounting Powered by SAP HANA
General Ledger Migration Paths
Service scope Service scope § Ledger merge (for P&L)
Migration scenarios* § Real-time integration CO-FI
Classic G/L at fiscal year end New G/L
Start § Parallel ledgers
in ERP Available in ERP
§ Document split
Upgrade to the Upgrade to the § Ledger merge (for B/S)
financials add-on financials add-on
Transition Transition
at period end
Migration scenarios** period end
at Planned functionality
G/L in SAP at fiscal year end G/L in SAP
Target Accounting Planned functionality Accounting
Logical Document Logical Document

Line-item detail Line-item detail
Faster processes Faster processes
§ Ledger merge (for P&L) § Ledger merge (for P&L)

§ Real-time integration CO-FI § Real-time integration CO-FI
§ Parallel ledgers
§ Document split
* service offered by AGS SLO
§ Ledger merge (for B/S)
** planned functionality
Finance Value Map
Covering All Business Areas Across All Roles
Head of Head of Chief

VP of Finance Corporate Treasurer
Corporate Reporting Finance Operations Compliance Officer
Financial Planning Accounting and Treasury and Finance Operations Enterprise Risk and
and Analysis Financial Close Financial Risk Compliance
Management Management
Strategy
Payments and Bank Receivables Enterprise Risk
Development and Accounting
Communications Management Management
Translation
Controls and
Planning, Budgeting, Cash and Liquidity Invoice
Entity Close Compliance
and Forecasting Management Management
Management
Profitability and Cost Debt and Investments International Trade

Corporate Close Travel Management
Management Management Management
Monitoring and Reporting and Financial Risk Real Estate

Fraud Management
Reporting Disclosure Management Management
Financial Close Commodity Risk Financial Shared

Audit Management
Governance Management Services

Roadmap: S/4 HANA Finance, central finance foundation
version 1.04 (March 2016)
Central Finance is based on functions and features available in S4/HANA Finance. Items below are specific to or enabled with Central Finance
§ Line-item level re-posting of financial documents from SAP § Central Real-time Consolidation (more) § Central AP/AR payment processing
and non-SAP ERP systems into Central Finance § Central Real-time Consolidation (CF items)
§ Additional CO posting scenarios1) (more)
§ Real-time replication (trigger and extract) via SLT § Central Material Ledger
Replication of AP/AR clearing & document
§ Master data replication via MDG, SLT, BAPI, etc. changes to Central Finance * § Support for Account-based CO-PA
§ Replication of production order master data 3) Fiori-based AP/AR reporting * § Support for Special Ledger
§ MDG-based master data mapping (harmonization) Intercompany reconciliation * § Central Fixed Asset Accounting
§ FI and CO1) (logistics & secondary CO posting) interfaces Central Cash Position / Liquidity Forecast 2) * § Replication reconciliation reports
§ Cost component split in inbound COGS (CO-PA) postings § Central AP/AR Process Orchestration (shared § Central Commitment Management
§ Consolidated entity reporting, Central process execution service) for dispute management, collections (Exposure Hub based)
§ Central Business Planning (BPC-based) prioritization, and central credit evaluation * § S/4HANA FINANCE Soft Close capabilities
§ Document drill-back § MDG-mapping (usability, mass upload, auditability) (forthcoming)
improvements
§ FI and CO error correction via AIF (new)
§ Simplification of configuration and initial data load
§ SLT parallelization (increased throughput) (new) (simulation, error analysis)
§ Additional CO posting scenarios1) (new) § EC-PCA replication into Universal Journal
§ Central Real-time Consolidation (BPC-based, initial wave 2)) (new) § Master data replication (projects / wbs)
* available as a pilot release
Solution today Planned innovation Future direction

SAP has no obligation to pursue any course of business outlined in this slide or to develop or release any functionality mentioned on this slide. This slide and SAP's strategy and possible future developments are subject to change and may be changed
by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-
infringement - 1) For details on CO posting scenarios see SAP Note 2103482 2) for scope limitations and availability ask SAP representative (or see guidance document on cFIN JAM page) 3) internal order, production order, product cost collector

General ledger
and account-
based CO-PA are
based on a single
account
framework
Documents in
CO-PA reflect
internal business
and management
requirements
The line items in

FI & CO become
one ‘virtual
accounting
document’ for a
richer financial
reporting
Central Finance Architecture (HANA Enterprise Cloud)

SAP S/4HANA FINANCE @ SAP
Major Values Realized
Account Receivables Books Closing Intercompany

Receivables Management Fast Close Enablement Reconciliation
Real-time
10% DSO Reduction 28% Improvement on

processing time 70% Reduction in time to
process
reconciliation issues
40% Reduction in GL
posting corrections
Simple receivables Changes focus from data I/CO reconciliation moved to a

management through preparation to analysis & real time process
integration of finance & sales interpretation
functions
HANA
No aggregates
Increased performance
© affiliate
© 2016 SAP SE or an SAP 2014 SAP AG or an SAP
company. All affiliate company. All rights reserved.
rights reserved. 73 73
Intercompany Reconciliation - Introduction
Environment:
n The Intercompany Reconciliation solution (ICR) is designed for use in Financial Accounting. It provides periodic control
of documents which describe the accounting transactions within the corporate group. ICR selects documents across
SAP systems and clients
Purpose:
n The purpose of ICR is to ensure that intercompany documents from accounting transactions within the corporate
group correspond to one another. It contains tools which check that documents have been correctly assigned to a
business transaction and which also enable you to find corresponding documents easily and to make additional
assignments. ICR operates on the level of companies and partner companies (trading partners).
n If the reconciliation process is successful this will ultimately lead to reduced differences in corporate group
consolidation.

Closing Process Without Intercompany Reconciliation
Company 1300 Company 2300

Company
Local Closing1200
Process Local Company 2200
Closing Process
Company 1100
Local Closing Process Company 2100
Local Closing Process
Company
Local 1000
Closing Process Company 2000
Local Closing Process
Local Closing Process Local Closing Process
Receivables 2000: EUR 5.000 Receivables 1000: USD 3.500
Payables 2000: USD 3.000 Payables 1000: EUR 3.000
USD 2.000
• Analysis of differences Corporate Group

difficult Group Closing Process
• No communication support Elimination of AP/AR
between local and group
accountants Receivables 1000 Payables 2000
• Posting Period closed EUR 5.000 EUR 3.000
already USD 2.000
Payables 1000 Receivables 1000
• … USD 3.000 USD 3.500

Closing Process With Intercompany Reconciliation
Company 1300 Company 2300
Company
Local Closing 1200 Local Company
Process Reconciliation 2200
Closing Process
Company
Local Intercompany
Closing 1100
Process Local Company
Closing 2100
Process
Company
Local Closing Intercompany
1000
• Find Reconciliation
differences as part
Process Local Company 2000
of Closing Process
Company
Local Closing Communicate
1300
•Process
Enable
local with
analysis
closing responsible
Company
early
process inLocal 2300 Process
the Closing
Company
Local Closing 1200
accountants
Process
closing process Local Company 2200
Closing Process
Company • 1100
Communicate with responsible
Company 2100USD 3.500
Local Closing
Receivables 2000: • EURProcess
Post5.000
Avoid differences Local
corrections Closing Process
Receivables
altogether 1000:
Company
Local Closing
Payables 2000: 1000 accountants
Process
USD 3.000 Local Company
Closing
Payables 2000
1000:Process
EUR 3.000
Local Closing Process Local Closing ProcessUSD 2.000
Receivables 2000: EUR 5.000 Receivables 1000: USD 3.500

Payables 2000: USD 3.500 Payables 1000: EUR 5.000
Corporate Group
Group Closing Process
Elimination of AP/AR
Receivables Payables
EUR 5.000 EUR 5.000
Payables Receivables
USD 3.500 USD 3.500

Data Presentation: ICE Cockpit
Unassigned documents of Unassigned documents of

selected company; flexible selected partner; flexible layout
layout to show any information to show any information
contained in Reconciliation DB contained in Reconciliation DB
Differences to be
reconciled per
partner Assigned documents for selected business relationship

Data Presentation: User Interface Functions
Send template based mails using

information from selected documents
Set communication and

processing status
Display original FI document in

operative system
Find matching document using

customizable business rules
Assign
Documents
Delete assignments
Create private and public notes; create

attachments; start workflow
Change layout: Display other fields,

change sort order, create subtotals,
etc,
Benefit: non-disruptive adoption
“Start using the central Finance as

parallel instance to minimize the
risk, migrate to the SAP Business
Suite powered by SAP HANA with
Financials add-on at a later point of
time”

Benefit: data harmonization
Keep existing SAP ERP and non-SAP systems in place. Transform data where required during the transfer from source system
to the new central finance instance
Transformation
during transfer
§ Unified data set for cross-
system process execution
and reporting
§ Common data structures
based on today’s
information and
management needs
“ Move beyond outdated and heterogeneous data models and reporting structures”
* requires respective SAP products and licenses (e.g. SAP Accounting powered by SAP HANA, SAP Business Planning)

Central Finance Architecture (On Premise)

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SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE
(or an SAP affiliate company) in Germany and other countries. Please see http://global12.sap.com/corporate-en/legal/copyright/index.epx for additional trademark
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National product specifications may vary.
These materials are provided by SAP SE or an SAP affiliate company for informational purposes only, without representation or warranty of any kind, and SAP SE or its
affiliated companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP SE or
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In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or
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02 S4HANA Finance and Central Finance

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S/4HANA Finance

Transform Finance with Instant Insight

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S/4HANA Finance Overview

Accounting Powered by HANA

Cash Management on HANA

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SAP S/4 HANA FINANCE IN A NUTSHELL

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Instant Insight Intuitive User Experience Flexible and Non-disruptive

Ad-hoc, real-time views

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Financial Accounting Treasury and Collaborative Enterprise Risk

Improve Financial, Operational, and Managerial Processes

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SAP Accounting SAP Cash Management SAP Integrated Business

Business Suite on HANA

SAP HANA Platform

Aligned Agile Predictive

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fields, currencies, multi-GAAP, etc.)

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HANA data base compression

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Universal Journal Innovation and Benefits

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Analyze Execute Control

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Accounting Entity Corporate Reporting and

Financial Process Controls

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Customer Pain Point Benefits of SAP

Time-consuming reconciliations Reconciled by design and/or powerful continuous reconciliation

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Higher profitability/growth Lower effort and costs

Higher quality/lower risk Requirements from

Higher company reputation/

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Soft Close – Better Insight within the Period

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Innovations and Benefits

GL and Management Reporting

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Modern User Experience

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SAP ERP SAP S/4 HANA SAP S/4 HANA

Accounting IC-Data Accounting IC-Data Accounting

Long-running batch Real-time processing for Real-time processing for

Modern User Experience

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Financial Reporting Management Reporting

Traditional Financial ERP

Unified Reporting SAP Accounting

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Bank Account yearly review process 7. Attachments

Suite on HANA Process optimization / innovation

HANA platform Real-time operational reporting

Logical Document Logical Document